Party TDs support our Budget stance, claim Labour rebels

Labour rebels claim to have support in the parliamentary party for their calls for a wealth tax in the budget.

Backbenchers Patrick Nulty and Tommy Broughan, who lost the whip last year after rebelling over cutbacks, said the Government could raise €365m a year by making those who have more pay more.

They, along with Labour MEP Nessa Childers, said a number of Fine Gael TDs are also likely to agree with their proposals after they published an article criticising the divisive Croke Park Agreement.

Mr Nulty said imposing a 48% tax on people earning more than €100,000 would help plug the country's massive deficit without hitting already struggling families.

"Many of our friends in the parliamentary Labour Party are already asking questions about it to ministers," said Mr Nulty.

"They clearly have some of the same feelings that we have."

None of the rebels was willing to put a figure on Labour TDs' support for a wealth tax but said they believe a majority would be in favour.

And he said he expects members of Labour's senior coalition partner Fine Gael to listen to their proposals - particularly after eight TDs today challenged the Government's decision to take public sector increments off the table when they could save the State €170m a year.

"If they were to support our proposals of a 48% rate for over €100,000, they could generate over €365m," Mr Nulty said.

"I hope those TDs will write an article next week supporting our proposals. They would be welcome to do so."

The backbenchers had been in touch with all their Labour colleagues about the impending Budget - in a bid to persuade them there was an alternative to €3.5bn in austerity cuts.

He insisted the group's three-point plan of introducing a wealth tax, imposing a 48% levy on earners of more than €100,000 and introducing a bankers' tax on financial transactions had the support of grassroots members.

"There's a groundswell of opinion among our own people that we need to move from this cutting agenda," said Mr Broughan.

"We need a change of course and we're trying to encourage our colleagues to embark on that change."

The group said its three tax proposals could save a total €1bn for the Irish Exchequer while treating low to middle-income families fairly. The plan would raise extra revenue without destroying the domestic economy, it added, and result in bankers giving something back to the economy.

The development has sparked further speculation that a growing number of Government backbenchers - from both sides of the coalition - have doubts about whether the Croke Park pay deal was delivering sufficient savings.

Public Expenditure Minister Brendan Howlin was forced into a shock U-turn to target 88 public sector allowances of the current 1,100 allowances that exist within the public sector.

Last month he admitted he could only target one of the increments. He had initially planed to shave €75m from the public pay bill, but only managed to save about €3.5m.